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ANZ shares hit record high

Greg Roberts

ANZ shares hit record highs as it lifted its dividend and posted a $3 billion-plus half year profit.

The bank has been regarded by some in the market as a stingy dividend payer and less efficient business than the other three big banks, but impressed on both counts on Tuesday.

Its shares were $1.50, or five per cent, higher at $31.60 at 1543 AEST after an intraday high of $31.84.

That was a record high, and was six years to the day since closing at $30.60 on April 30, 2007.

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ANZ chief executive Mike Smith said he was pleased with the diversity and quality of the earnings, with a greater hedging mix of earnings from overseas and business banking to go with mortgages than the other majors.

He said the global economy was still fragile and Europe was likely to be a mess for a while but he still felt genuinely positive about the near to medium term.

"Things are improving in the US and that's going to help global growth," Mr Smith said as he released the results.

"I think things have stabilised in China, and that will help this region."

The net profit for the six months to March 31 was up one per cent at $2.94 billion.

There was a 10 per cent jump in cash profit - the ANZ's preferred measure, stripping out one-off costs and gains - to $3.18 billion, slightly above expectations.

The interim dividend of 73 cents, fully franked, was up 11 per cent on last year.

Morningstar analyst David Ellis said the result had ticked all the boxes and noted comments by the bank that it would target a dividend payout ratio at the upper end of its 65 to 70 per cent range.

"That's what retail investors are looking for at the moment, high yields," he told AAP.

ANZ had reduced its reliance on short-term wholesale funding and debt, which was down to 20 per cent in Tuesday's results from 29 per cent five years ago, and with an increased share from customer deposits and equity.

"ANZ still has plenty of room to move in this area and over the coming years will need to drive the Asian and international sector, particularly, to offset any loss in market share in Australia," Mr Lucas said.

Mr Smith was bullish on Asia, where the bank's future growth is heavily invested, saying the shift in economic power from the west to the east had decades to run.

The bulk of the bank's earnings still come from Australia and New Zealand, with only 20 per cent derived from offshore.